Travel subsidy will not increase this year

The coalition and Framsókn will not support a proposal to increase the travel subsidy this year, Kringvarp Føroya (KVF) reports. The proposal was submitted by Tjóðveldi and Sjálvstýri.

The majority on the Finance Committee said that measures may sometimes be necessary when oil prices become unusually high, but that the government cannot introduce support packages every time prices rise.

The government should instead monitor developments and assess when measures are needed, the committee majority said in its report on the proposal.

A proposal on the travel subsidy had been expected in the spring. Together with a planned increase to the energy supplement, it was intended to replace the government’s proposal for a temporary VAT exemption on petrol and diesel.

Measures of this kind do not target support precisely, the majority said. The proposal would also benefit people who own electric cars or use Bygdaleiðir, even though they are not affected by high oil prices. Someone driving 29 kilometres a day in a petrol car would receive nothing, while someone driving 30 kilometres in an electric car would receive an additional five kroner per day, the coalition members on the committee said.

Ruth Vang of Framsókn, who had been involved in plans to submit the proposal in the spring, also no longer supports it because 20 million kroner has already been spent on the VAT exemption.

Vang said it would have been right to implement the proposal from Tjóðveldi and Sjálvstýri, but that she could not support it now that the 20 million kroner had been spent. The committee majority also referred to that expenditure. The two parties behind the proposal say it would cost five million kroner.

The proposal’s second reading and vote are scheduled for Friday.